Bloomberg: Historically, Declining RV Industry Sales Has Meant Broader Economic Woes

Interesting article implicating that impending downward trends in RV sales might be a sign for broader weakness economy.

"For the past three decades, deliveries of motor homes and travel trailers have dropped before each decline in the U.S. economy, giving the $15 billion industry a reputation as a bellwether. As the U.S. housing slump worsens, gasoline prices rise and consumer confidence wanes, RV sales are forecast to slide this year and next."

Two Interesting Articles from Bloomberg

Two interesting articles from Bloomberg on prominent investors.

1) Bill Ackman plans to donate his profits to charities from his short bets on bond insurers
2) Ken Heebner's CGM Focus Fund is up 60% YTD

The Citi Deal: Was the Media's Interpretation of the Deal Just Plain Wrong?

I must admit, when I saw the barebones characteristics of the Citi-Abu Dhabi deal, I thought it was an "incredible" sweetheart deal for Ahu Dhabi. 11% yield on a convert just seemed outlandish given that the media was comparing this deal to straight junk bonds that weren't convertible and were at about 9% yields.

It appears the media had misrepresented the underlying economics of the deal and the appropriate comparisons that one should make when analyzing this deal.

Portfolio Magazine's Felix Salmon puts it into perspective well here.

Salmon based his perspectives on a post by another blogger who outline the underlying economics and tradeoffs to arrive at 11% being reasonable.

Motley Fool Publishes Part I of "The Greatest Investment Quotes of All Time"

Motley Fool recently published what it considers to be Part I of the "Greatest Investment Quotes of All Time."

Mark Cuban's Innovative Facebook Application Idea

On his blog, Mark Cuban just posted an interesting Facebook application idea. Check out the app idea here.

Arbitron's PPM problems cause stock to plummet

Yesterday, Arbitron released negative news related to its PPM rollout. See the news here on the announcement of market rollout delays and the subsequent stock weakness.

Here is Arbitron's announcement that was released after the market closed yesterday.

IDD Blog

IDD Magazine has started its own blog on the market. Check it out here.

Guide to the Subprime Marketplace

Although a little dated (2006), this is a decent overview of how the subprime market works, its characteristics, etc.

Housing Environments This Bad Have Been Accompanied by Recessions

The NYTimes cites historical the fact that historical housing slumps have been accompanied by recessions.

NYTimes: Popular Stores Don't Make Great Investments Anymore

Peter Lynch popularized "invest in what you know" but as the NY Times notes, the franchise with all of the buzz can often be a disappointing stock.

Some Investing Tips From Great Investors

Here are some time-tested investing tips from the gurus.

Interview with Bill Miller

There was a pretty good interview with Bill Miller from a new quarterly publication on investing called Globe Investor Magazine. The magazine is published by Canadian newspaper Globe and Mail. See the Bill Miller article here.

A Tribute to Ben Graham

The editor of Grant's Interest Rate Observer provides the text of the speech he gave on Ben Graham. See the speech here.

Goldman's Downgrade of Citi

On Monday Goldman stirred the market when it downgraded Citi to a "Sell." Goldman's analyst based this decision on the threat of:

- more CDO writedowns at Citi
- pressure on the firm to shore up its declining Tier 1 Capital ratio
- declining consumer credit trends
- lack of clear leadership

By the end of the day, Citi shares had declined 6%, reaching four-year lows.

You can read the Goldman Research Report Here.

A Broker's Rite of Passage

Portfolio Magazine had an interesting article on the transformation of Blaine Lourd as a stock broker.

KKR, Apollo, et. al continue to show control over Wall Street

Bloomberg had an interesting article yesterday that outlined how the mega private equity shops have cornered aspects of the CLO market, which means that many of the funds are buying back the leveraged loans cheaper than what they stuck Wall Street with earlier this summer.

Alea: Putting Subprime in its Context

So the Alea Blog had a posting recently that pointed to the fact that the subprime segment is only a small sliver of the credit market and thus perhaps worries are overblown in the marketplace.

The post also had a link to an interesting report put out by the UK government that basically outlines the subprime scenario and provides a guide to what sparked the chaos in the credit market and how controls tried to curb the paranoia.

Latest ChiBus Column

Here is the latest ChiBus column.

Buzz: Goldman Sachs Research Report on Mortgage Defaults is Getting a lot of Attention

So no less than 5 major news sources have been referencing a research report put out by Goldman Sachs economist Jan Hatzius. You can see the report for free right here.

It's a short piece that focuses on how the mortgage writedowns and the subprime fallout could become a contagion for other aspects of the general economy. The key, according to Hatzius, is that losses from the mortgage fallout represented leveraged losses, which is different than how most investors perceive their personal stock portfolio losses.

Excerpt:
At first glance, it might seem that even $400 billion is too small relative to the size of the financial markets to have a significant effect on the real economy. After all, a $400 billion loss is equivalent to only 2½% of the market capitalization of US equities—equivalent, in other words, to one bad day in the stock market. No serious analyst would argue that a 2½% equity market decline will make an important difference to the economic outlook. So what’s different about the mortgage credit losses?

In a word, leverage. The broader knock-on effect from equity market losses is small because most equities are held by long-only investors, who do not adjust their portfolios in response to a capital loss. According to the Fed’s flow of funds tables, less than 3% of all US equities are held by banks, savings institutions, broker-dealers, or government-sponsored enterprises, all of which are highly leveraged. Although the flow of funds accounts contain no data on hedge funds, we believe that even including hedge funds the total proportion of equities held by leveraged investors would be well below 10%. The remaining 90%+ is mostly held by long-only investors such as households, mutual funds, insurance companies, and private and public pension funds."

More press coverage on this research report:

NYTimes Article
Thomson Financial
Reuters
Bloomberg
Barron's

Phil Dawson's Kick for the Browns - Unreal Scenario

There's a first time for everything, or so the adage goes. Could an officiating crew change it's call on whether a field goal was good or not? It happened today, in an unlikely scenario for the Browns and Ravens. Watch the clip here.

Former University of Chicago Professor Now a Great Oil Price Speculator

Former UofC econ professor now an astute oil professor.

NYTimes: As Novastar tanked, management still did okay for themselves

Cash dividends on unvested options? That's what Novastar mgmt was getting even as the Company's financials plummeted, according to the New York Times.

Renters Feel Housing Bust Pain

The NYTimes highlights how renters are feeling the pain of foreclosures in the housing market.

Inside the PayPal Mafia: A Modern Day Success Story

Fortune Magazine goes inside the PayPal mafia to highlight the midas touch that ex PayPal employees seem to have when it comes to investing in new businesses.

Mimicking Buffett Not a Bad Strategy

Even though investors would be buying "after the fact," mimicking Buffett turns out to be a decent trade.

Inside Google's Foray into Mobile Data

The WSJ provides insight into Google's interest in buying wireless spectrum in a government auction.

Sam Zell Interview

Time Magazine had a pretty interesting interview with real estate mogul turned Tribune Company speculator. Check it out here.

Steven Roach on the Subprime Economy

Good analysis of the subprime economy from Steven Roach. His point that global decoupling may not be as apparent as many think makes perfect sense.

M&A Outlook for 2008 from The Deal Conference

The Deal has its annual M&A outlook this week and all eyes are clearly on where the buyout market will be given the credit crunch. Check out a presentatiom from the conference here.

Here is the DealBlogs' overview of the entire conference.

Financial Times: Failed Buy-Outs To Exceed $200B

According to the Financial Times, "there have been 76 lost deals worth $202.3bn so far, including the CVC Capital Partners bid for Sainsbury and Cerberus Capital Management's abortive offer for Affiliated Computer Services, said Dealogic."

Here is the entire story.

Economics of Trusting Experts

The NYTimes had an interesting economic analysis of the "trustworthiness" of so-called experts such as auto mechanics. See it here.

Research Recap: A Great Site for Sifting Through Research Reports

This is a great website that highlights and summarizes interesting research reports. It's called Research Recap - Check it out here

Gisele Bundchen Hates the Dollar Too

Warren Buffett, Bill Gross, and other "smart money" managers are bearish on the dollar. Add Gisele Bundchen to that list.

Cromartie's Field Goal Return of 109 yards

The Chargers' Cromartie returns a missed field goal 109 and shatters Vasher's old record for longest NFL play. Check it out here...

Great Resource For Getting Fund Manager Commentary

I have found it increasingly difficult to track new shareholder letters from top fund managers. The process traditionally requires one to periodically go to different fund sites and see if anything new has been published. I stumbled upon Gurufocus.com and found this resource on their website to be valuable and updated frequently. Check it out.